Slight non-political aside - Truss may have wanted to think about wearing a different dress. She may have worn it first, but…
I’d like to know the numbers of people in the UK who have mortgages that are vulnerable to increased interest rates.
I suspect it is quite a significant number.
For people buying their first property, the terms must be very challenging. Some mortgage lenders stopped lending during the recent panic.
I am looking forward to finding a decent interest rate for savings that goes some way to protecting against inflation. The UK has grown used to a low interest rates and low inflation for many years now. It will come as a shock to many if that period is now at an end.
Anecdotally, I’d say 75% of my UK-based friends are shitting themselves over this. The rest are already all paid up.
Required answer: “How cunning is it?”
It has exposed the buy-to-let market, which is pretty significant in the UK, perhaps even locking them into repossessions.
It’s a no brainer for buy-to-let people (if you are ok with maintaining and renting houses). I think it was a sevenfold increase in prices over 20 years if you bought a house , perhaps 6.5 fold including inflation. The increase in the asset was great and could be paid off by renting them. Compare that to savings which probably are down at least 30% vs inflation over the last 20 years.
People have some money. They buy a house. They mortgage that house out, and buy more (perhaps smaller ones). Renting these out covers the mortgage repayments, often, if all goes well, clearing the rented houses and owning them in 20 odd years. Then they mortgage them again, and buy more houses.
It all is theoretically good because they can sell up one of their mortgaged houses to clear the outstanding debts and buy some leeway on other others, if things go unrented or mortgages rise normally.
However, the shock of recent weeks means mortgages are being withdrawn in bulk across the UK. You can’t sell because nobody is buying them, and they can’t get a mortgage if they want to. Leaving the exposed potentially vunerable to default on houses mortgaged against owned property. Deep discounting doesn’t work if nobody there to buy them, and then it’s a falling market.
To understand the potential disastrous nature of this, I think every politician from MP to local councillor owns significant amount of buy to let property (at least the tory end), and their voters. It was the only real investment in the UK in the last 3 decades of any worth.
And rising house prices has been the cornerstone of the Tory vote since the 90s. House prices are gods to them. Everything can go by the wayside, and they even dropped Stamp Duty (the tax on buying houses) during the pandemic to create a crazy mini-boom there too. A house crash is long overdue and this one might be hard.
So, best I can find:
There are 6.9 million mortgage holders in the UK
In the next year, c.1.8 million fixed-term mortgages will need renewing. So c.25% of all mortgage holders. Peak will be in Q2 2023.
Affordability of a mortgage is a function not just of interest rate but also of loan-to-income ratio. This chart shows that a 6% rate would, on the basis of modern loan to income ratios, mean that mortgage payments as share of income would be the highest they’ve been in 30 years. So while 6% mortgage rate may not be historically unusual, monthly payments of >25% of income are.
This week in tory, with such things as:
"45. Truss blamed it all on Kwarteng
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So Gove attacked Truss
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Then Badenoch attacked Gove
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So Mordaunt attacked them all
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Then Braverman attacked Truss
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So Simon Hoare and Badenock both attacked Braverman
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These squabbling wangs are our government"
Ah, the circular firing squad. Good to see the classics still in use.
This story is doing the rounds - available from numerous sources (including The Independent, but you have to register).
Mr Perlstein told Times Radio the work was inspired by what he presumed was “transparently and self-evidently a moral and political critique of the notion that you should bamboozle the public”…
…“The idea that someone would come across the account that I offer of the cynicism, intellectual vacuity, and just basic emptiness of the promises that were made by Ronald Reagan in this regard, and say, ‘Jolly good, this is what I’m going to try for England’, is kind of mind-blowing.
“America is bad off with Trump, but this is a terrible situation for England that they would endorse a leader like this.”
Trying to select an alternative source to the Independent, I happened across this related piece from back at the end of September:
j
Baldrick being in charge of the Tory economic plans explains a lot. 
Once again*, the Tories’ have a conference design failure:
*Making her grandstand speech as PM a couple of years ago, Theresa May was upstaged by some poor adhesive
More news from conference:
Meanwhile, how’s Conference going for her Minister for Trade?
j
On the other hand he’s gotten some good news: Knighthood:
Beggars belief, doesn’t it?
j
And they still take honours seriously in Britain? Knowing all the scoundrels who’ve received them?
Well… the people who get them seem to.
j
British culture has a strong class element.
Big business, and the owners and editors of newspapers as well as politicians all want recognition of their greatness, especially if they come from humble origins. Being made a Lord means you have arrived and part of the establishment that runs the country. They are used by the PM to reward favours. Big contributions to party funds by tycoons and political supporters. The PM buys their support by dangling the prospect of a Lordship under their nose. When a PM leave office we get to see which bunch of rascals they decide to award a ‘gong’, a medal.
Those elevated to the House of Lords are now quite numerous. They are supposed to do important committee work revising laws. But many do little more than claim expenses. Reform of the House of Lords is always on the ‘to do’ list. But like other constitutional matters, it requires lots of political time that a government with a political program can ill afford. Reform is now long overdue,
There is also a wide range of lesser honours that are awarded to ordinary people who do good work. These are greatly appreciated, you get to go the Palace and see the monarch and it is a much more democratic process.
Boris Johnson’s honours list is due out soon and we will see which rascals he is has decided deserve a gong.
“It’s as cunning as a fox what used to be Professor of Cunning at Oxford University but has moved on and is now working for the U.N. at the High Commission of International Cunning Planning.”
How popular would it be to revise the honours list to eliminate this “exit dump” kind of list?
Very popular with the voters.
With Prime Ministers …… not so much.
I guess the US equivalent is the discretion the President has to appoint his political friends to influential positions in the administration. But idiots can do real damage there.
Being made a ‘life peer’ by a grateful PM and being called a Lord. They can’t do so much damage up there. It is organised into political parties, but it is balanced and there are lots of Lords who are independent of political affiliations. Some are, in fact, reserved for senior clerics and there are peerages that are inherited. It is a very old institution full of curious anomalies The idea is that it is composed of ‘wise men and women’ to scrutinise and laws made by the House of Commons. But its ability to block laws from being passed on political grounds is limited because they are unelected. So the idiots cannot do much damage. The House of Commons is where the executive political power resides around the Prime Ministers cabinet of Ministers and they are all elected MPs.
Reform of the House of Lords is an item that tend to get postponed regularly from political programs. There are far too many peers now. It has a larger membership than the House of Commons, which is a concern. There will be some political fireworks when Boris Johnson’s list is published.